FDA approves oral psoriatic arthritis drug

Celgene is looking to upset the psoriatic arthritis market. The company announced Friday that the FDA approved its drug Otezla—the first oral phospohodiesterase 4 inhibitor.

Jefferies analyst Thomas Wei said in a Monday research note that the approval was no surprise, partly because the FDA approved Takeda's Daxas, which has the same mechanism of action. Daxas is approved for COPD.

The company said in a statement that it wants to position the drug as a pre-biologic. This could be significant because it would mean doctors may opt for Otezla before cornerstone market drugs like Pfizer's Enbrel, AbbVie's Humira and Janssen's Stelara.

ISI analyst Mark Schoenebaum's side-by-side comparison of this peer group in his Friday analysis shows another reason prescribing the drug first may be important for Celgene: Otezla's American College of Rheumatology score is lower than that of Enbrel, Humira, Simponi and others.

The ACR assesses patient improvement after taking a medication, and Otezla has a 20% improvement among 32% to 41% of patients, whereas Enbrel, Humira and Simponi are at the 50% patient mark or higher. Otezla scored an ACR of 50—meaning a 50% improvement—among 11% to 16% of patients, compared to Enbrel, Humira and Simponi patients, which showed more than 30% of patients saw their conditions improve by 50%.

Both Schoenebaum and Wei wrote that the drug's safety profile is solid, although Celgene has to establish a patient registry to track the drug's impact on pregnant women and on weight, but price is a bit of flag for Schoenebaum. The ISI analyst wrote that the drug is around $22,500 for a year's worth of treatment, a bracket which means the drug's wholesale price is about 25% cheaper than Stelara and 10% cheaper than Simponi.

Schoenebaum wrote that this is higher than he expected, and that payer reaction will determine if this discount is enough. He also notes that Pfizer tried the discount-as-incentive for Xeljanz in the RA space but that the price cuts “haven't (yet?) helped uptake, though Xeljanz had significant safety concerns while Otezla's safety profile is potentially best-in-class.”